TABLE OF CONTENTS

PLAN, DO, CHECK, ACT CYCLE............................................................................................3

THE CONCEPT OF PDCA CYCLE......................................................................................3

Plan.........................................................................................................................................4

Do........................................................................................................................................... 4

Check..................................................................................................................................... 4

Act:......................................................................................................................................... 4

EXAMPLE OF THE USE OF THE PDCA CYCLE IN STRATEGIC MANAGEMENT

ACCOUNTING....................................................................................................................... 5

EXAMPLE OF THE USE OF THE PDCA CYCLE IN A COMPANY................................. 5

ADVANCES IN MANUFACTURING TECHNOLOGIES.................................................. 6

COMPUTER -INTEGRATED MANUFACTURING (CIM)................................................ 7

LESSON LEARNED.................................................................................................................... 9

1
PLAN, DO, CHECK, ACT CYCLE

The PDCA cycle, also known as the Deming Cycle or Deming Wheel, is an
iterative four step quality improvement and management agile process typically used
for the better of the business strategy. It also functions as a framework for all
management processes. Since this cycle is conceptualized as a continuous process with
never-ending stages; through this, the components of the business that still need
improvement can be identified. It was invented by Dr. Walter Andrew Shewhart and
then developed further by Dr. William Edwards Deming. The four primary stages of
this cycle are, namely, plan, do, act, and check. In strategic management accounting, the
purpose of the PDCA cycle is to provide a framework for continuous improvement that
allows internal, specifically management accountants, to make meaningful decisions
that can contribute to the organization's financial management practices and have an
impact on the organization's ability to attain its goal. Furthermore, employing this
approach fosters an ability to adapt and respond to the inevitable changes in the
corporate environment, which promotes long-term success and growth.

2
THE CONCEPT OF PDCA CYCLE

Plan

Establish the objectives and processes necessary to deliver results in accordance with
the expected output (the target or goals). By making the expected output the focus, it
differs from other techniques in that the completeness and accuracy of the specification
is also part of the improvement.

· Identify the steps and goals required to get the intended outcomes, focusing
great attention to the precision and thoroughness of the specifications.

Do

Implement the new processes, often on a small scale if possible, to test possible effects. It
is important to collect data for charting and analysis for the following "CHECK" step.

· Gather information for analysis and put new procedures into place, preferably
on a modest scale.

Check

Measure the new processes and compare the results (collected in "DO" above) against
the expected results (targets or goals from the "PLAN") to ascertain any differences.

3
Charting data can make this much easier to see trends in order to convert the collected
data into information. Information is what you need for the next step "ACT"

· Compare new procedures to anticipated outcomes, use data analysis to spot

similarities and inconsistencies.

Act

Analyze the differences to determine their cause. Each will be part of either one or more
of the PD-C-A steps. Determine where to apply changes that will include improvement.
When a pass through these four steps does not result in the need to improve, refine the
scope to which PDCA is applied until there is a plan that involves improvement.

· Examine variations to figure out the reasons behind them, then adjust as
necessary to continue the cycle of improvement.

EXAMPLE OF THE USE OF THE PDCA CYCLE IN STRATEGIC MANAGEMENT

ACCOUNTING

The management accountant can utilize this cycle, for instance, if a company
wants to lower production costs in order to increase profitability. By consistently
employing this method, they can ensure successful results by identifying areas that
require improvement through frequent reviews of their practices and strategies. In the
plan stage, which is the first stage in this cycle, if the corporation wants to lower
production costs, they could first define what steps or methods they need to accomplish
it. The management accountant can look at the company's financial statements to find
areas where excessive production costs have negatively impacted profitability. Based on
this information, the accountant develops strategies, like renegotiating contracts with
suppliers, streamlining production, and putting cost-cutting measures in place. In the
do stage, the management accountant could work with departments to renegotiate
contracts and optimize workflows. They can also evaluate progress and put cost-saving

4
measures into place. During the check stage, the accountant determines if the actual
production costs reach the desired reductions by comparing the goals to the results.
Then, in the act stage, if the strategies fail, adjustments are to be made, and these
adjustments must be first discussed with key stakeholders in the firm, even though they
are starting from the planning stage. Then, they may continue to use the PDCA cycle to
assess whether any additional improvements are required to make the business more
successful.

EXAMPLE OF THE USE OF THE PDCA CYCLE IN A COMPANY

Nike is a big company that is well-known for making a wide range of

sportswear. One prominent instance of an issue or circumstance that Nike resolved by
applying the PDCA method is the following:

Plan: Nike identified that there were labor law violations and poor working conditions
in its contractor factories. By establishing a new code of conduct, educating people
about workers' rights, and offering safety training, they intended to fix this.

Do: Despite the difficulties brought on by regional regulations, Nike implemented these
solutions in Vietnam on a limited basis. This included delivering basic training on
factory operations and safety procedures.
Check: Nike kept an eye on these solutions' execution to make sure they improved
working conditions and complied with labor laws. To evaluate progress, they probably
conducted audits and solicited feedback from staff.

Act: Nike expanded the implementation of these solutions to all of its plants worldwide
and made necessary adjustments to its strategy based on the feedback and outcomes.
This indicates a dedication to ongoing development and systematic problem-solving.

In conclusion, the Plan-Do-Check-Act (PDCA) cycle is critical to strategic cost

management because it promotes a continuous improvement mindset. The traditional

5
technique of depending on a single, stable strategy is no longer effective in the complex
and uncertain environment of today. Firms can find inconsistencies, maximize
procedures, and cut costs by consistently planning, implementing, evaluating, and
improving cost management strategies. Additionally, this strategy helps businesses
remain flexible and responsive by enhancing adaptability to changing business
conditions. The PDCA cycle, which quickly identifies and fixes potential issues, also
helps with risk management in relation to cost management. It involves employees of
all levels contributing their ideas to improve solutions and increase happiness.
Ultimately, the PDCA cycle ensures that cost-control initiatives align with long-term
business goals, leading to sustained success.

ADVANCES IN MANUFACTURING TECHNOLOGIES

Technology is the practical application of scientific knowledge, instruments, and

methods, especially in manufacturing, industry, communication, and other sectors. It
includes a broad spectrum of inventions intended to solve issues, boost productivity,
and advance human potential, ranging from straightforward instruments to intricate
systems. All things considered, technology is a major force behind the development of
contemporary civilization and many facets of human progress.

That being said, numerous technological innovations have transformed

manufacturing, resulting in notable improvements in productivity, quality, and
personalization. Repetitive and labor-intensive processes in manufacturing have been
automated by automation technologies. Technology has paved the way to the
development of lighter, stronger, and more durable industrial materials as the result of
advances in materials science, including nanotechnology and sophisticated composites.
This not only boosts efficiency but also improves consistency and

lowers errors. Moreover, demand forecasting, logistics, and inventory management are
just a few of the supply chain operations that technology is essential to managing.

6
 Technology is still reshaping the manufacturing sector, encouraging innovation,
boosting competitiveness, and influencing future output. Some examples of advances in
manufacturing technologies are the design, simulation, and management of
manufacturing processes have been greatly enhanced using advanced software. By
simulating manufacturing processes, optimizing production workflows, managing
product data throughout its lifecycle, and creating complicated product geometries,
these software solutions help designers and engineers produce higher-quality products
more quickly.

A great example of this is the way technology made just-on-time (JIT) possible. It
is a tactic used in manufacturing and supply chain management. JIT inventory methods
are improved by advanced production technologies in a number of ways like by
analyzing enormous volumes of historical data, machine learning algorithms and
predictive analytics technologies are able to estimate future demand trends and spot
possible supply chain problems. Manufacturers may ensure that resources are supplied
precisely when needed for production while optimizing inventory levels, minimizing
stockouts, and minimizing surplus inventory by utilizing these analytical capabilities.

In conclusion, manufacturing technologies—which offer real-time data insights,

predictive analytics capabilities, supply chain visibility, support for lean manufacturing,
and supply chain digitization solutions—are essential for enabling and improving
management methods. Manufacturers can optimize inventory levels, lower costs, boost
customer happiness, and improve operational efficiency by efficiently utilizing these
technologies.

COMPUTER -INTEGRATED MANUFACTURING (CIM)

A Computer-Integrated Manufacturing (CIM) system is an advanced

manufacturing approach where various manufacturing processes are seamlessly
integrated using computer technology. This also integrates all office and factory
functions within a company. Computers control everything from design and planning
to production and quality control. They manage inventory, monitor equipment

7
performance, and adjust production schedules in real-time based on demand and
available resources.

This also involves automation in computers, machines and other equipment that
may help the firm to process everything smoothly on time. One example of this is the
computer-controlled machine that can make a firm’s work even faster and more
convenient, because this can switch the production from one to another. This usually
focuses from large production volumes necessary to absorb fixed overhead to a new
emphasis on marketing efforts, engineering, and product design.

The advantages for CIM vary. CIMS aligns various stages of the manufacturing
process, including design, production, and logistics, into a cohesive workflow. This
integration ensures seamless communication and coordination between different
departments, reducing delays and errors that can occur when information is isolated
from others. Additionally, CIM systems often incorporate real-time monitoring and
feedback mechanisms, allowing for continuous quality control throughout the
manufacturing process. This helps detect and rectify defects or inconsistencies
promptly, leading to higher quality products and customer satisfaction.

In a few of many examples, P&G (Procter & Gamble) leverages CIM to optimize
its global supply chain and manufacturing operations for consumer goods such as
household products and personal care items. By integrating production planning,
inventory management, and distribution processes, P&G can respond quickly to
changing market demands while minimizing costs and lead times. Additionally, Tesla's
Computer-Integrated Manufacturing (CIM) system seamlessly integrates design,
production, and customization, ensuring precision, efficiency, and innovation at every

8
step of the electric vehicle manufacturing process, from battery production to final
assembly and delivery.

All in all, computer-Integrated Manufacturing (CIM) is a technology-driven

approach that integrates various manufacturing processes, including design,
production, and logistics, into a cohesive workflow. It reduces delays and errors by
coordinating departments and ensuring seamless communication. And lastly, it helps
lessen our workload and human labor. CIM systems empower manufacturers to
enhance productivity, quality, and responsiveness, ultimately driving competitive
advantage in today's dynamic marketplace. As technology continues to evolve, CIM is
implemented to play a pivotal role in shaping the future of manufacturing, enabling
companies to stay ahead of the curve and deliver value to customers worldwide.